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G.S. Rajakumar Vs. Dr. Subramoniam Poti and anr. - Court Judgment

LegalCrystal Citation
SubjectCriminal
CourtKerala High Court
Decided On
Judge
Reported in1979CriLJ738
AppellantG.S. Rajakumar
RespondentDr. Subramoniam Poti and anr.
Cases ReferredVelji Raghavji Patel v. State of Maharashtra
Excerpt:
- - 1250/- and after a period of 3 months the petitioner was un satisfied with the service rendered by the first respondent and therefore he was discharged from service. , that with this amount hospital equipments were purchased and the petitioner as well as the respondent were conducting th devi mission hospital as a partnership con-corn......establish ''entrustment of dominion' over property to an accused person the mere existence of that person's dominion over property is not enough. it must be further shown that his dominion was the result of entrustment. therefore, as rightly pointed out by harris c. j., the prosecution must establish that dominion over the assets or a particular asset of the partnership was, by a special agreement between the parties, entrusted to the accused person. if in the absence of such a special agreement a partner receives money belonging to the partnership he cannot be said to have received it in a fiduciary capacity or in other words cannot be held to have been 'entrusted' with dominion over partnership properties.on the question of applicability of section 403 the supreme court spoke in the.....
Judgment:
ORDER

P. Subramonian Poti, J.

1. The petition is one under Section 482 of the Cr.P.C. to call for records in C. C. 41 of 1978 of the Court of the Judicial Magistrate of the First Class, Kottarakkara and to quash the above said proceedings. The case of the petitioner here who is the accused in the said Criminal case is that on the averments made in the complaint no offence against the petitioner has been made out and the complaint has been filed only with a view to harass the petitioner and not to seek any genuine relief. The petitioner in this case is a graduate in medicine, registered as a Medical Practitioner. So is the case with the first respondent in this petition who is the complainant before the Magistrate. A private hospital in the name 'Devi Mission Hospital' was established at Nilamel and that according to the petitioner was by himself and with his own investment. But the case of the first respondent in his complaint is that it was established with funds contributed by him too on the understanding that it will be run as a partnership concern. His further case is that it was being run as a partnership concern. The petitioner's case is that the first respondent was only a person employed by him on a monthly salary of Rs. 1250/- and after a period of 3 months the petitioner was un satisfied with the service rendered by the first respondent and therefore he was discharged from service. The first respondent is said to have claimed compensation for premature termination of service but that was not given. It is the petitioner's case that this resulted in the complaint filed by the respondent on 13-2-1978. The complaint was followed up with a motion for search and pursuant to the order of the court the business premises of the petitioner were searched, various items of hospital equipments and furniture were seized and these were entrusted to a third party pending disposal of the Criminal Complaint.

2. The first respondent had filed the complaint on the averment that on the understanding that petitioner and himself would contribute equally for establishing a private hospital he contributed an amount of Rupees 7500/-. the petitioner contributed an equal amount;, that with this amount hospital equipments were purchased and the petitioner as well as the respondent were conducting th Devi Mission Hospital as a partnership con-corn. Finding that this was not profitable, this was closed after sometime and the equipments and furniture were moved over to a place at Nilamel on 14-10-1977 and from 21-10-1977 a private Hospital was opened there again as a partnership concern. He would say that the possession of the petitioner of the equipments and furniture was only as that of a partner. The first respondent took leave for a week and went home. According to him when he returned on 24-1-1978 he was prevented from entering into the hospital and thus he was denied the joint possession of the equipments of the hospital. It was further said that an attempt 'is being made to claim the furniture and equipment as that of the petitioner's wife as also the wife of a friend of the petitioner, that some record is being created for that purpose and further that on the strength of such record the petitioner is planning to pledge these equipments with the local branch of the Federal Bank. This, it is said, constitutes, offences punishable under Sections 406 and 424, I. P. C. and action is prayed for.

3. Assuming all the averments are true has a case been made out by the first respondent of offences, punishable under Section 406 or Section 424, I. P. C? That is the question which calls for consideration, for, if there be no case made out I may be justified in interfering on the petitioner's motion.

4. In order to bring the case within Section 424, I. P. C. it is necessary to show that there has been dishonest or fraudulent concealment or removal of any property or dishonest or fraudulent assistance in the matter of concealment or removal of the property. The other part of Section 424 is not applicable and therefore it is not adverted to- There is no case in the complaint that any furniture or equipments have been concealed or removed. The facts averred do not indicate any such removal or concealment. What is stated is that they are still there, but that the complainant is being obstnicted from exercising the rights of joint possession over them. The question of assisting in the dishonest or fraudulent removal arises only if there is concealment. Therefore Section 424, I. P. C. is not applicable.

5. An offence punishable under Section 400, I P. C. could be spelt out only if there ii criminal breach of trust within the meaning of Section 405, I. P C. That section requires proof of entrustment of property or any dominion over property and conversion to one's own use of such property or dishonest use or disposal of property in violation of any direction of law prescribing the mode in which such trust is to be discharged or of any legal contract, express or implied, which such person hag made touching the discharge of such trust of a case where the person accused wilfully suffers any other person so to do. The essence of the offence is (1) entrustment of property or dominion over property and (2) dishonest misappropriation or conversion to one's own use.

6. There is no case of independent entrustment averred in the complaint. What Is stated is that with partnership funds equipments and furniture were purchased for the partnership and these were in the joint pos session of the partners as it ought to be. Could it be said that in such a case Section 405, I. P. C. is attracted. Partnership is a relation created by the parties coming together by agreement to carry on a joint venture. The rights and obligations of the partners are defined by the provisions of the Partnership Act and the terms of the agreement to the extent such terms would be consistent with the provisions of the Partneship Act. The property of the firm does not belong to the partners in any particular share. Until dissolution, no partner could be said to own or possess any particular right or share in any specific item of partinership property. It is only the final settlement of accounts at dissolution that can determine the exclusive right of any erstwhile partner to any item of such property. It may be that in some item of partnership property a partner may not be found to have any right at all at such dissolution. It may be that because of his accountability on settlement of accounts a partner may be found entitled to no item of property. It is equally possible that a partner may be found entitled to all assets of the partnership at the dissolution. The fact that the partnership property belongs to the firm does not in any way indicate that any partner has entrusted his share to the other partner. Any one of the partners can act on behalf of the firm. That is a right created by the statute. To attract Section 405 I. P. C. entrustinent is necessary. Such enstrustment cannot be read in the mere relationship of partners. This is not to rule out the possibility or entrustment eyen as between partners. Parties may agree upon one of the partners advancing money or supplying material or property for the purpose of the firm with an obligation on the other or others to account for it. In regard to such money or property there may be an entrustment and hence a charge of misappropriation concerning such property may be possible. But that is not the case here. The averment of the complainant is that himself and the petitioner were in joint possession of the partnership assets, but now he is kept out of its use. There is no case to find entrustment of such assets by one partner with the other.

7. The further question would be whether if not criminal breach falling under Section 405 could it be said that an offence of criminal misappropriation falling under Section 403 I. P. C. is made out? That too may not arise in the case of property of a partnership firm exclusively possessed by one of the partners. The question of misappropriation of another's property may not arise, for, until dissolution the property which is appropriated by one of the partners cannot be said to be another's pro- perty and therefore properly speaking an of-fence under Section 403 I. P. C. would also not arise. The rights of the parties in such circumstances will have to be settled by resort to the civil Court, in the event of dispute.

8. What I have said here finds support in the decision of the Supreme Court in Velji Raghavji v. State of Maharashtra : 1965CriLJ431 . On the question of absence of entrustment in the mere relation of partners the Supreme Court State thus (at pp. 433, 434 of Cri LJ):

It seems to us that the view taken in Bhuban Mohan Rana's case ILR (1952) 2 Cftl 23 : 52 Cri LJ 723 (FB) by the later Full Bench of the Calcutta High Court is the right one. Upon the plain reading of Section 405, I. P. C. it is obvious that before a person can be said to have committed criminal breach of trust it must be established that he was either entrusted with or entrusted with dominion over property which he is said to have converted to his own use or disposed of in violation of any direction of law etc. Every partner has dominion over property by reason of the fact that he is a partner. This is a kind of dominion which every owner of property has over his property But it is not dominion of this kind which satisfies the requirements of Section 405. In order to establish ''entrustment of dominion' over property to an accused person the mere existence of that person's dominion over property is not enough. It must be further shown that his dominion was the result of entrustment. Therefore, as rightly pointed out by Harris C. J., the prosecution must establish that dominion over the assets or a particular asset of the partnership was, by a special agreement between the parties, entrusted to the accused person. If in the absence of such a special agreement a partner receives money belonging to the partnership he cannot be said to have received it in a fiduciary capacity or in other words cannot be held to have been 'entrusted' with dominion over partnership properties.

On the question of applicability of Section 403 the Supreme Court spoke in the same decision thus (at p. 434 of Cri LJ).

Mr. Chatterjee finally contends that the act of the appellant will at least amount to dishonest misappropriation of property even though it may not amount to criminal breach of trust and, therefore, his conviction could be altered from one under S- 409 to that under Section 403. Section 403 runs thus :Whoever dishonestly misappropriates or converts to his own use any moveable pro- perty, shall be punished with imprisonment of either description for a term which may extend to two years, or with fine, or with both.

It is obvious that an owner of property, in whichever way he uses his property and with whatever intention will not be liable for misappropriation and that would be so even if he is not the exclusive owner thereof. As already stated, a partner has, undefined ownership along with the other partners over all the asj sets of the partnership. If he chooses to use any of them for his own purposes he may be accountable civilly to the other partners. But he does not thereby commit any misappropriation. Mr, Chatterjee's alternative contention must be rejected.

9. My attention was drawn by Sri Krishnan Nair, learned Counsel for the first respondent to the decision of the Supreme Court in De-babrata Gupta v. S. K. Ghosh : [1970]3SCR765 . That was a case different, on facts, from the case in Velji Raghavji Patel v. State of Maharashtra : 1965CriLJ431 . There was a plea in that case that there was special entrustment of money by one of the partners for the completion ot the work undertaken by the firm and there was accountability on account of the special entrustment. That was subject of the dispute, The plea of misappropriation was urged in re' gard to money which was so accountable Such plea was not a matter which could have been decided by the court in proceedings under Section 482 of the Code. The Supreme Court noticing that there was dispute in the case as to whether there was any special entrustment of any property considered it not proper to express any opinion on the merits and therefore the caso had necessarily to be tried. The decision in Velji Raghavji Patel v. State or Maharashtra : 1965CriLJ431 , was noticed and the principle laid down in the said case was said to be not applicable to Debabrata Gupta's case. Explain-ing the decision the Supreme Court said thus:

this Court in Patel's case : 1965CriLJ431 (supra) approved the decision of the Calcutta High Court in Bhuban Mohan Rana v. Surendra Mohan Das ILR (1952) 2 Cal 23 : 52 Cri LJ 723 (FB) and said that before criminal breach of trust is established it must be shown that the person charged has been entrusted with property or with dominion over the property. In other words, the offence of criminal breach of trust under Section 406 of the I. P. C. is not in respect of property belonging to the partnership but is an offence committed' by the person in res- pect of property which has been specially entrusted to such a person and which he holds in a fiduciary capacity.

10. Where there is plea of criminal breach of trust in respect of property which has been specially entrusted to a partner and which he holds in a fiduciary capacity applicability of Section 406 of the Indian Penal Code may arise, but where there is no such plea no question of the offence of misappropriation will arise.

11. On the question whether Section 403 I. P. C. would have applied to a case of a person excluding the other partners from partnership property and appropriating it to himself, though a view contrary to what has been said here has been expressed earlier by some of the High Courts that is seen to be based upon a decision of the Full Bench of the High Court of Calcutta in Nrigendro Lall Chatterjee v. Okhoy Coomar Shaw, (1892) 21 Suth WR (Cri) 59, the said view had been taken in the decisions of some High Courts following the Full Bench decision of the Calcutta High Court. But a later Full Bench of the Calcutta High Court in Bhuban Mohan Rana v. Surendra Mohan Das : AIR1951Cal69 reversed the earlier decision and the Supremo Court in Velji Raghavji Patel v. State of Maharashtra : 1965CriLJ431 approved the view expressed by the later Full Bench as the correct view.

12. In the case before me the averments, as I pointed out, do not indicate the elements of an offence under Section 405 punishable under Section 406 or Section 424 I. P. C, and therefore the complaint cannot stand.

In the result, the petition is allowed and the proceedings in C C 41 of 1978 before the Judicial Magistrate of the First Class, Kot-tarakkara is quashed. The articles seized pursuant to the search ordered by the court may be returned to the petitioner.


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